[Federal Register Volume 64, Number 224 (Monday, November 22, 1999)]
[Proposed Rules]
[Pages 63768-63773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30178]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 301

[REG-104939-99]
RIN 1545-AX13


Definition of Last Known Address

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document contains proposed regulations defining ``last 
known address'' in relation to the mailing of notices of deficiency and 
other notices, statements, and documents sent to a taxpayer's last 
known address. The proposed regulations affect taxpayers who receive 
notices of deficiency and other notices, statements, and documents sent 
to taxpayers' last known addresses.

DATES: Written or electronic comments and requests for a public hearing 
must be received by February 22, 2000.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-104939-99), room 
5226, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand delivered Monday through 
Friday between the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (REG-
104939-99), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC. Alternatively, taxpayers may submit 
comments electronically via the Internet by selecting the ``Tax Regs'' 
option on the IRS Home Page, or by submitting comments directly to 
http://www.irs.gov/tax__regs/regslist.html (the IRS Internet site).

FOR FURTHER INFORMATION CONTACT: Concerning submissions, Michael 
Slaughter, (202) 622-7180; concerning the regulations, Charles A. Hall, 
(202) 622-4940 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

In General

    This document contains proposed amendments to the Regulations on 
Procedure and Administration (26 CFR part 301) under section 6212(b) 
relating to the sufficiency of a notice of deficiency if it is mailed 
to the last known address of a taxpayer. This document also contains 
proposed amendments to the Income Tax Regulations (26 CFR part 1) and 
the Regulations on Procedure and Administration (26 CFR part 301) to 
provide cross-references to the proposed last known address rules under 
section 6212(b) in order to apply those rules to other notices, 
statements, and documents required to be sent to the last known address 
of a taxpayer.

Last Known Address

    Many statutory and regulatory provisions refer to the last known 
address of a taxpayer. However, current law with respect to the last 
known address of a taxpayer has developed under section 6212(b), 
relating to the address for mailing a notice of deficiency. Generally, 
under section 6501, the IRS has three years from the date a Federal tax 
return is filed, or the due date for the return if the return is filed 
early, to assess a deficiency. Under section 6213, the IRS may not 
assess or collect a deficiency until after the notice of deficiency has 
been mailed to the taxpayer giving the taxpayer an opportunity to 
petition the United States Tax Court. Under section 6212(b), an 
otherwise valid notice of deficiency is sufficient if it is mailed to 
the taxpayer's last known address, even if it is not received by the 
taxpayer.
    The term last known address is not defined by statute or current 
regulations. However, case law defines last known address as the 
``address which appears on the taxpayer's most recently filed return, 
unless [the IRS] has been given clear and concise notification of a 
different address.'' Abeles v. Commissioner, 91 T.C. 1019, 1035 (1988), 
acq. 1989-2 C.B. 1. The taxpayer's most recently filed return for this 
purpose is the last return filed by the taxpayer from which, if the 
return was properly processed, the address on the return was available 
to the IRS agent mailing a notice of deficiency. Id. at 1035.
    The taxpayer provides the IRS with clear and concise notification 
of a change of address by affirmatively informing the IRS that the 
former address is not to be used. See King v. Commissioner, 857 F.2d 
676, 681 (9th Cir. 1988); Monge v. Commissioner, 93 T.C. 22, 32 (1989). 
Although the IRS must exercise due diligence in ascertaining the last 
known address and in mailing the notice of deficiency to the correct 
address after having become aware of a taxpayer's change of address, 
that duty does not require the IRS to change the taxpayer's last known 
address based on information from third party sources. See Grencewicz 
v. Commissioner, 60 T.C.M. (CCH) 1300, 1302 (1990). Accordingly, under 
current law, clear and concise notification does not include taxpayer 
notification to third parties, such as payors or the United States 
Postal Service (USPS). See Adams v. Commissioner, 68 T.C.M. (CCH) 291, 
294 (1994), aff'd sub nom., Miller v. Commissioner, 76 A.F.T.R.2d (RIA) 
95-5903 (10th Cir. 1995) (forwarding order filed with USPS not clear 
and concise notice to IRS); Selman v. Commissioner, 61 T.C.M. (CCH) 
2184, 2186 (1991) (USPS change of address form not notice to IRS 
because no evidence IRS received form); Martin v. Commissioner, 64 
T.C.M. (CCH) 1529, 1531 (1992) (citing Selman); Grencewicz v. 
Commissioner, 60 T.C.M. (CCH) 1300, 1302 (1990) (IRS not required to 
review Forms 1099 and Schedule K-1); Greenstein v. Commissioner, 60 
T.C.M. (CCH) 379, 382 (1990) (Forms W-2G and Form 1099-DIV not 
sufficient notice).

Current IRS Procedures for Changing Last Known Address

    The IRS has prescribed rules for providing clear and concise 
notification of a different address in Rev. Proc. 90-18 (1990-1 C.B. 
491). Under Rev. Proc. 90-18, a taxpayer must give clear and concise 
written notification of a change of address to the Internal Revenue 
Service Center that serves the taxpayer's old address or to the Chief, 
Taxpayer Service Division, in the local district office. The revenue 
procedure applies to notices required to be sent to a taxpayer's last 
known address under sections 982(c)(1), 6110(f)(3)(B), 6212(b), 
6303(a), 6325(f)(2)(A), 6331(d)(2)(C), 6332(b)(1), 6335(a) and (b), 
6901(g), and 7609(a)(2). Rev. Proc. 90-18, section 2.01. Although not 
included in Rev. Proc. 90-18, section 6110(f)(4)(B) also requires a 
notice to be sent to a taxpayer's last known address. Since publication 
of Rev. Proc. 90-18, four new sections have been added to the Code that 
reference last known address. See sections 6245(b)(1), 6320(a)(2)(C), 
6330(a)(2)(C), and 7603(b)(1). Future updates of Rev. Proc. 90-18 will 
incorporate these new sections, as well as section 6110(f)(4)(B).
    Under section 5.04 of Rev. Proc. 90-18, taxpayers may provide the 
IRS with clear and concise notification of a different address in one 
of three ways. First, a taxpayer may send the IRS a signed statement 
informing the IRS that the taxpayer wants the address of record

[[Page 63769]]

changed to a new address. In addition to the new address, this 
notification must contain the taxpayer's full name, signature, old 
address, and social security number and/or employer identification 
number. Filers of a joint return should provide both names, social 
security numbers, and signatures. Individuals who have changed last 
names, for instance, due to marriage, should provide the last name 
shown on the most recently filed return and the new last name. In all 
cases, clear and concise written notification must be specific as to a 
change of address. Thus, a new address reflected in the letterhead of 
taxpayer correspondence will not by itself change a taxpayer's address 
of record.
    Second, if the IRS sends correspondence to the taxpayer that 
solicits or requires a response by the taxpayer and the taxpayer 
returns the correspondence to the IRS with corrections marked on the 
taxpayer's address information, the return of the correspondence will 
constitute clear and concise written notification of a change of 
address. The taxpayer's signature on the correspondence is not 
required.
    Third, the taxpayer may file a Form 8822, ``Change of Address,'' 
with the IRS.
    In addition to the rules prescribed in Rev. Proc. 90-18, the IRS 
currently accepts oral notification of a different address, provided 
the request is made in the context of an inquiry about the taxpayer's 
account. Courts have acknowledged the validity of oral notification of 
a change of address for purposes of last known address under section 
6212(b), provided the notification is sufficiently clear, is given to a 
proper representative of the IRS, and is established by competent 
proof. See Mollet v. Commissioner, 82 T.C. 618, 625-26 (1984). Future 
updates of Rev. Proc. 90-18 will permit the oral notification of a 
change of address.

Explanation of Provisions

    The proposed regulations define last known address consistent with 
the definition set forth in Abeles. Accordingly, the proposed 
regulations provide that the taxpayer's last known address is the 
address that appears on the taxpayer's most recently filed and properly 
processed Federal tax return, unless the IRS is given clear and concise 
notification of a different address.
    The proposed regulations also provide that the IRS will use an 
address obtained from the United States Postal Service (USPS) as a 
taxpayer's last known address in the absence of a more recent address. 
Although current law does not require the IRS to treat a taxpayer's 
notification to a third party, such as a payor or the USPS, as clear 
and concise notification of a different address for purposes of 
determining a last known address, the IRS and the Treasury Department 
are not prohibited from prescribing a rule that would allow the IRS to 
consult a third party source for the taxpayer's most current address.
    Thus, the proposed regulations provide that beginning in May 2000, 
the IRS will refer to the USPS's National Change of Address (NCOA) 
database to obtain a taxpayer's address for purposes of determining the 
taxpayer's last known address. The proposed regulations also provide 
that the rules for last known address under Sec. 301.6212-2 apply for 
purposes of other notices, statements, and documents mailed by the IRS 
to a taxpayer's last known address pursuant to the Internal Revenue 
Code or regulations. In addition, the regulations propose to amend 
existing regulations that use the term ``last known address'' to cross 
reference the regulations to Sec. 301.6212-2.

NCOA Database

    The NCOA database is a computerized record of changes of address 
maintained by the USPS. This database retains address changes for a 
thirty-six month period. USPS obtains the change of address information 
from a properly submitted USPS Form 3575, ``Official Mail Forwarding 
Change of Address Form.'' Both businesses and individuals use the Form 
3575. Individuals may indicate whether the change of address applies to 
the individual or, if applicable, the individual's entire family.

Updating Master File

    In May 2000, and again in November 2000, and annually thereafter in 
each November, the Martinsburg Computing Center (MCC) in Martinsburg, 
West Virginia, will access the NCOA database to update all taxpayer 
address records maintained in the IRS's automated master file for 
purposes of updating the IRS's mailing list. Generally, if the 
taxpayer's name and the last known address maintained in the automated 
master file match the taxpayer's name and old mailing address contained 
in the NCOA database, within certain tolerances, the IRS will use the 
new address obtained from the NCOA database to update the automated 
master file. The updated address will be the taxpayer's last known 
address, unless the IRS is given clear and concise notification of a 
different address. However, due to IRS system limitations, if taxpayers 
file jointly, but the NCOA database contains change of address 
information for only one spouse, the earliest this rule will apply is 
January 2001. The IRS will publish further guidance as to when this 
rule will apply to these joint filers.
    In addition, beginning in May 2000, prior to mailing correspondence 
to any particular taxpayer from an IRS Service Center, the IRS will 
access the NCOA database to determine if the taxpayer submitted a Form 
3575 to the USPS with a more recent address. If so, the following will 
occur: (1) The correspondence will be mailed to the address obtained 
from the NCOA database, and (2) the IRS will use the new address from 
the NCOA database to update the automated master file. This updated 
address will be the taxpayer's last known address. Similar to the 
exception relating to the annual update, however, this rule will not be 
effective any earlier than January 2001 if taxpayers file jointly, but 
the NCOA database contains change of address information for only one 
spouse.
    If the taxpayer subsequently files a return with an address other 
than the address on the Form 3575, the taxpayer's last known address 
will be the address on the subsequently filed and properly processed 
return. Similarly, if the taxpayer submits a Form 8822, ``Change of 
Address,'' (or other clear and concise notification of a change of 
address) to the IRS after the taxpayer submits a Form 3575 to the USPS, 
the taxpayer's last known address will be the address on the Form 8822 
(or on the clear and concise notification). In each instance, the IRS's 
master file will be updated to reflect the taxpayer's new last known 
address.
    The IRS will not access the NCOA database prior to mailing 
correspondence from district offices and posts of duty. Unlike Service 
Centers, these locations do not have the systems capability to check 
the NCOA database for individual mailings at this time. Instead, the 
IRS will use the address stored in the automated master file. For 
purposes of correspondence mailed from district offices and posts of 
duty, the address on the IRS automated master file, as updated through 
the use of the NCOA database, will be the taxpayer's last known 
address.
    Using the NCOA database will increase customer service by allowing 
faster delivery of IRS correspondence to a taxpayer. Rather than 
mailing correspondence to an address which is no longer a taxpayer's 
address and relying on the USPS to forward mail to the taxpayer's most 
recent address, the IRS will mail the correspondence

[[Page 63770]]

directly to the taxpayer's most recent address. In addition, by 
updating the automated master file with the most recent address, future 
IRS correspondence will be mailed to the taxpayer's most recent 
address.
    Although use of the NCOA database will result in improved delivery 
in most cases, such use does not completely eliminate the taxpayer's 
need to provide the IRS with clear and concise notification of a 
different address. For instance, if the taxpayer changes the address of 
a residence or business and submits a Form 3575 with the USPS, but does 
not wish to change the taxpayer's address for purposes of IRS 
correspondence, then the taxpayer must notify the IRS as provided in 
Rev. Proc. 90-18. It should be noted, however, that even if the 
taxpayer notifies the IRS to continue using the old address for IRS 
correspondence, the USPS may forward the correspondence to the address 
on the USPS Form 3575.

Licensing Agreement with USPS

    To gain access to the NCOA database, the IRS has applied to the 
USPS to become a limited licensee of the NCOA database. As a limited 
licensee, the IRS will receive from the USPS a copy of the entire 
thirty-six month NCOA database and periodic updates thereto in 
electronic format. The USPS will not have access to confidential return 
information as a result of this process. Moreover, unlike organizations 
that have entered into general licensing agreements with the USPS for 
use of the NCOA database, the IRS will not provide name and address 
matching services to commercial customers. Rather, the IRS will only 
use the NCOA database to update taxpayers' addresses maintained in the 
automated master file in the manner prescribed by these regulations. 
The IRS and the Treasury Department invite comments regarding whether 
the IRS should become a licensee for the limited purpose of updating 
its automated master file.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. Therefore, a regulatory assessment is not required. It also has 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply to these regulations, and because 
these regulations do not impose a collection of information on small 
entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not 
apply. Pursuant to section 7805(f) of the Internal Revenue Code, this 
notice of proposed rulemaking will be submitted to the Chief Counsel 
for Advocacy of the Small Business Administration for comment on its 
impact on small business.

Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any electronic or written comments (a 
signed original and eight (8) copies) that are submitted timely to the 
IRS. The IRS and Treasury Department request comments on the clarity of 
the proposed rules and how they can be made easier to understand. All 
comments will be available for public inspection and copying. A public 
hearing may be scheduled if requested by any person that timely submits 
comments. If a public hearing is scheduled, notice of the date, time, 
and place for the hearing will be published in the Federal Register.
    Drafting Information: The principal author of these regulations is 
Charles A. Hall, Office of Assistant Chief Counsel (Income Tax and 
Accounting). However, other personnel from the IRS and Treasury 
Department participated in their development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR parts 1 and 301 are proposed to be amended as 
follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 2. In Sec. 1.468A-5, paragraph (c)(1)(ii) is amended by adding 
a sentence at the end of the paragraph to read as follows:


Sec. 1.468A-5  Nuclear decommissioning fund qualification requirements; 
prohibitions against self-dealing; disqualification of nuclear 
decommissioning fund; termination of fund upon substantial completion 
of decommissioning.

* * * * *
    (c) * * *
    (1) * * *
    (ii) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter.
* * * * *
    Par. 3. Sectioni 1.503(a)-1 is amended by adding a sentence at the 
end of the concluding text of paragraph (c) to read as follows:


Sec. 1.503(a)-1  Denial of exemption to certain organizations engaged 
in prohibited transactions.

* * * * *
    (c) * * *
    * * * For further guidance regarding the definition of last known 
address, see Sec. 301.6212-2 of this chapter.
* * * * *
    Par. 4. In Sec. 1.547-2, paragraph (b)(1)(v) is amended by adding a 
sentence after the third sentence of the paragraph to read as follows:


Sec. 1.547-2  Requirements for deficiency dividends.

* * * * *
    (b) * * *
    (1) * * *
    (v) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter. * * *
* * * * *
    Par. 5. In Sec. 1.856-6, paragraph (g)(5) is amended by adding a 
sentence after the first sentence of the paragraph to read as follows:


Sec. 1.856-6  Foreclosure property.

* * * * *
    (g) * * *
    (5) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter. * * *
* * * * *
    Par. 6. In Sec. 1.860-2, paragraph (b)(1)(ii) is amended by adding 
a sentence after the fourth sentence of the paragraph to read as 
follows:


Sec. 1.860-2  Requirements for deficiency dividends.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter. * * *
* * * * *
    Par. 7. In Sec. 1.963-6, paragraph (c)(5) is amended by adding a 
sentence after the second sentence of the paragraph to read as follows:


Sec. 1.963-6  Deficiency distribution.

* * * * *

[[Page 63771]]

    (c) * * *
    (5) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter. * * *
* * * * *
    Par. 8. In Sec. 1.992-3, paragraph (c)(3)(iv) is amended by adding 
a sentence after the third sentence of the paragraph to read as 
follows:


Sec. 1.992-3  Deficiency distributions to meet qualification 
requirements.

* * * * *
    (c) * * *
    (3) * * *
    (iv) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter. * * *
* * * * *
    Par. 9. In Sec. 1.6081-2, paragraph (f) is amended by adding a 
sentence at the end of the paragraph to read as follows:


Sec. 1.6081-2  Automatic extension of time to file partnership return 
of income.

* * * * *
    (f) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter.
* * * * *
    Par. 10. In Sec. 1.6081-3, paragraph (d) is amended by adding a 
sentence at the end of the paragraph to read as follows:


Sec. 1.6081-3  Automatic extension of time for filing corporation 
income tax returns.

* * * * *
    (d) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter.
* * * * *
    Par. 11. In Sec. 1.6081-4, paragraph (c) is amended by adding a 
sentence at the end of the paragraph to read as follows:


Sec. 1.6081-4  Automatic extension of time for filing individual income 
tax returns.

* * * * *
    (c) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter.
* * * * *
    Par. 12. In Sec. 1.6081-6, paragraph (d) is amended by adding a 
sentence at the end of the paragraph to read as follows:


Sec. 1.6081-6  Automatic extension of time to file trust income tax 
return.

* * * * *
    (d) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter.
* * * * *
    Par. 13. In Sec. 1.6081-7, paragraph (d) is amended by adding a 
sentence at the end of the paragraph to read as follows:


Sec. 1.6081-7  Automatic extension of time to file Real Estate Mortgage 
Investment Conduit (REMIC) income tax return.

* * * * *
    (d) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2 of this chapter.
* * * * *

PART 301--PROCEDURE AND ADMINISTRATION

    Par. 14. The authority citation for part 301 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 15. In Sec. 301.6110-4, paragraph (c)(3) is amended by adding 
a sentence at the end of the paragraph to read as follows:


Sec. 301.6110-4  Communications from third parties.

* * * * *
    (c) * * *
    (3) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2.
* * * * *
    Par. 16. In Sec. 301.6110-5, paragraph (b)(4) is amended by adding 
a sentence at the end of the paragraph to read as follows:


Sec. 301.6110-5  Notice and time requirements; actions to restrain 
disclosure; actions to obtain additional disclosure.

* * * * *
    (b) * * *
    (4) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2.
* * * * *
    Par. 17. In Sec. 301.6110-6, paragraph (b)(2)(v) is amended by 
adding a sentence at the end of the paragraph to read as follows:


Sec. 301.6110-6  Written determinations issued in response to requests 
submitted before November 1, 1976.

* * * * *
    (b) * * *
    (2) * * *
    (v) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2.
* * * * *
    Par. 18. Section 301.6212-2 is added to read as follows:


Sec. 301.6212-2  Definition of last known address.

    (a) General rule. Except as provided in paragraph (b)(2) of this 
section, a taxpayer's last known address is the address that appears on 
the taxpayer's most recently filed and properly processed Federal tax 
return, unless the Internal Revenue Service (IRS) is given clear and 
concise notification of a different address.
    (b) Address obtained from third party--(1) In general. Except as 
provided in paragraph (b)(2) of this section, change of address 
information that a taxpayer provides to a third party, such as a payor 
or another government agency, is not clear and concise notification of 
a different address for purposes of determining a last known address 
under this section.
    (2) Exception for address obtained from the United States Postal 
Service--(i) Annual update. Annually, the IRS will update taxpayer 
addresses maintained in IRS records by referring to data accumulated 
and maintained in the United States Postal Service (USPS) National 
Change of Address database that retains change of address information 
for thirty-six months (NCOA database). Except as provided in paragraph 
(b)(2)(ii) of this section, if the taxpayer's name and last known 
address in IRS records match the taxpayer's name and old mailing 
address contained in the NCOA database, within certain tolerances, the 
new address in the NCOA database is the taxpayer's last known address, 
unless the IRS is given clear and concise notification of a different 
address.
    (ii) Update prior to mailing any notice, statement or document from 
an IRS Service Center. Prior to mailing any notice, statement, or other 
document, including a notice of deficiency, to the taxpayer from an IRS 
Service Center, the IRS will update the taxpayer's last known address 
by referring to the NCOA database. If the taxpayer's name and last 
known address in IRS records match the taxpayer's name and old mailing 
address contained in the NCOA database, within certain tolerances, the 
new address in the NCOA database is the taxpayer's last known address, 
unless the IRS is given clear and concise notification of a different 
address.
    (iii) Duration of address obtained from NCOA database. The address 
obtained from the NCOA database under paragraph (b)(2)(i) or (ii) of 
this section is the taxpayer's last known address until one of the 
following events occurs--
    (A) The taxpayer files and the IRS properly processes a Federal tax 
return with an address different from the address obtained from the 
NCOA database; or
    (B) The taxpayer provides the IRS with clear and concise 
notification of a

[[Page 63772]]

change of address, as defined in procedures prescribed by the 
Commissioner, that is different from the address obtained from the NCOA 
database.
    (3) Examples. The following examples illustrate the rules of 
paragraph (b)(2) of this section:

    Example 1. (i) A is an unmarried taxpayer. The address on A's 
1999 Form 1040, U.S. Individual Income Tax Return, filed on April 
14, 2000, and 2000 Form 1040 filed on April 13, 2001, is 1234 
Anyplace Street, Anytown, USA 43210. On May 15, 2001, A informs the 
USPS of a new permanent address (9876 Newplace Street, Newtown, USA 
12345) using the USPS Form 3575, ``Official Mail Forwarding Change 
of Address Form.'' The change of address is included in the USPS 
NCOA database.
    (ii) In June 2001 the IRS determines a deficiency for A's 1999 
tax year and prepares to issue the notice of deficiency. When the 
IRS mails the notice of deficiency from the Service Center, the IRS 
refers to the NCOA database and updates the taxpayer's last known 
address to 9876 Newplace Street, Newtown, USA 12345. On June 15, 
2001, the IRS mails a notice of deficiency to A at 9876 Newplace 
Street, Newtown, USA 12345. For purposes of section 6212(b), the 
notice of deficiency mailed on June 15, 2001, is mailed to A's last 
known address.
    Example 2. (i) The facts are the same as in Example 1, except 
that instead of determining a deficiency for A's 1999 tax year in 
June 2001, the IRS determines a deficiency for A's 1999 tax year in 
December 2001. The IRS performs its annual update of addresses in 
November 2001. At this time the taxpayer's address maintained in IRS 
records was changed to 9876 Newplace Street, Newtown, USA 12345.
    (ii) On December 14, 2001, the IRS mails a notice of deficiency 
to A at 9876 Newplace Street, Newtown, USA 12345. For purposes of 
section 6212(b), the notice of deficiency mailed on December 14, 
2001, is mailed to A's last known address.
    Example 3. (i) B is an unmarried taxpayer. The address on B's 
1999 Form 1040, U.S. Individual Income Tax Return, filed on April 
14, 2000, is 1234 Main Street, Mytown, USA 56789. In September 2000, 
B informs the USPS of a new permanent address (4321 Maple Street, 
Ourtown, USA 54321) using the USPS Form 3575, ``Official Mail 
Forwarding Change of Address Form.''
    (ii) In September 2000, the IRS determines a deficiency for B's 
1998 tax year and prepares to issue the notice of deficiency in the 
Service Center. On September 15, 2000, the IRS refers to the NCOA 
database to update the taxpayer's last known address. Because B did 
not inform the USPS of a change of address in sufficient time to be 
included in the NCOA database on September 15, 2000, the NCOA 
database does not yet contain any address information for B. On 
September 15, 2000, the IRS mails a notice of deficiency to B at 
1234 Main Street, Mytown, USA 56789. For purposes of section 
6212(b), the notice of deficiency mailed on September 15, 2000, is 
mailed to B's last known address.
    Example 4. (i) C is an unmarried taxpayer. The address on C's 
1998 Form 1040, U.S. Individual Income Tax Return, filed on April 
15, 1999, and 1999 Form 1040 filed on April 14, 2000, is 2468 Spring 
Street, Little City, USA 97531. On August 15, 2001, C informs the 
USPS of a new permanent address (8642 Peachtree Street, Big City, 
USA 13579) using the USPS Form 3575, ``Official Mail Forwarding 
Change of Address Form.'' The IRS performs its annual update of 
addresses in November 2001.
    (ii) In September 2001 the IRS district office for Little City, 
USA determines a deficiency for C's 1998 tax year and prepares to 
issue the notice. When the IRS mails the notice of deficiency from 
the district office, the IRS does not refer to the NCOA database 
because IRS systems are not capable of checking the NCOA database 
for individual mailings other than for Service Center 
correspondence. On September 17, 2001, the IRS mails a notice of 
deficiency for tax year 1998 to C at 2468 Spring Street, Little 
City, USA 97531. For purposes of section 6212(b), the notice of 
deficiency mailed on September 17, 2001, is mailed to C's last known 
address.
    (iii) Also in September 2001, the IRS determines a deficiency 
for C's 1999 tax year. When the IRS mails this notice of deficiency 
from the IRS Service Center, the IRS refers to the NCOA database and 
updates the taxpayer's last known address to 8642 Peachtree Street, 
Big City, USA 13579. On September 18, 2001, the IRS mails a notice 
of deficiency for tax year 1999 to C at 8642 Peachtree Street, Big 
City, USA 13579. For purposes of section 6212(b), the notice of 
deficiency mailed on September 18, 2001, is mailed to C's last known 
address.
    Example 5. The facts are the same as in Example 4, except that 
the IRS Service Center mails the notice of deficiency for C's 1999 
tax year on September 10, 2001, after updating the taxpayer's last 
known address by referring to the NCOA database. On September 17, 
2001, when the district office prepares to mail the notice of 
deficiency for C's 1998 tax year by referring to the IRS's automated 
master file, the taxpayer's address will appear as 8642 Peachtree 
Street, Big City, USA 13579. Thus, in both cases, for purposes of 
section 6212(b), the taxpayer's last known address is 8642 Peachtree 
Street, Big City, U.S.A. 13579.

    (c) Last known address for all notices, statements, and documents. 
The rules in paragraphs (a) and (b) of this section apply for purposes 
of determining whether all notices, statements, or other documents are 
mailed to a taxpayer's last known address whenever the term last known 
address is used in the Internal Revenue Code or the regulations 
thereunder.
    (d) Effective Date--(1) In general. Except as provided in paragraph 
(d)(2) of this section, the rules prescribed by this section apply to 
all notices, statements, and other documents mailed on or after May 1, 
2000.
    (2) Individual moves in the case of joint filers. In the case of 
taxpayers who file joint returns under section 6013, if the NCOA 
database contains change of address information for only one spouse, 
paragraphs (b)(2) and (3) of this section will not apply to notices, 
statements, and other documents mailed before January 1, 2001.
    Par. 19. In Sec. 301.6303-1, paragraph (a) is amended by adding a 
sentence at the end of the paragraph to read as follows:


Sec. 301.6303-1  Notice and demand for tax.

* * * * *
    (a) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2.
* * * * *
    Par. 20. In Sec. 301.6305-1, paragraph (b)(2)(ii) is revised to 
read as follows:


Sec. 301.6305-1  Assessment and collection of certain liability.

* * * * *
    (b) * * *
    (2) * * *
    (ii) The name, social security number, and last known address of 
the individual owing the assessed amount. For further guidance 
regarding the definition of last known address, see Sec. 301.6212-2;
* * * * *
    Par. 21. In Sec. 301.6320-1T, paragraph (a)(1) is amended by adding 
a sentence at the end of the paragraph to read as follows:


Sec. 301.6320-1T  Notice and opportunity for hearing upon filing of 
notice of Federal tax lien (temporary).

    (a) * * * (1) * * * For further guidance regarding the definition 
of last known address, see Sec. 301.6212-2.
* * * * *
    Par. 22. In Sec. 301.6325-1, paragraph (f)(2)(ii)(a) is revised to 
read as follows:


Sec. 301.6325-1  Release of lien or discharge of property.

* * * * *
    (f) * * *
    (2) * * *
    (ii) * * *
    (a) Mailing notice of the revocation to the taxpayer at his last 
known address (see Sec. 301.6212-2 for further guidance regarding the 
definition of last known address); and
* * * * *
    Par. 23. In Sec. 301.6330-1T, paragraph (a)(1) is amended by adding 
a sentence at the end of the paragraph to read as follows:


Sec. 301.6330-1T  Notice and opportunity for hearing prior to levy 
(temporary).

    (a) * * * (1) * * * For further guidance regarding the definition 
of last known address, see Sec. 301.6212-2.
* * * * *

[[Page 63773]]

    Par. 24. In Sec. 301.6331-2, paragraph (a)(1) is amended by adding 
a sentence after the second sentence of the paragraph to read as 
follows:


Sec. 301.6331-2  Procedures and restrictions on levies.

    (a) * * * (1) * * * For further guidance regarding the definition 
of last known address, see Sec. 301.6212-2. * * *
* * * * *
    Par. 25. Section 301.6332-2 is amended as follows:
    1. Paragraphs (b)(1) introductory text, (b)(1)(i), and (b)(1)(ii) 
are redesignated as paragraphs (b)(1)(i) introductory text, 
(b)(1)(i)(A), and (b)(1)(i)(B), respectively.
    2. In newly designated paragraph (b)(1)(i)(B), the text beginning 
with the second sentence is designated as paragraph (b)(1)(ii).
    3. Newly designated paragraph (b)(1)(ii) is amended by adding a 
sentence after the second sentence of the paragraph. The addition reads 
as follows:


Sec. 301.6332-2  Surrender of property subject to levy in the case of 
life insurance and endowment contracts.

* * * * *
    (b) * * * (1) In general. (i)* * *
    (ii) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2. * * *
* * * * *
    Par. 26. In Sec. 301.6335-1, paragraph (b)(1) is amended by adding 
a sentence after the third sentence of the paragraph to read as 
follows:


Sec. 301.6335-1  Sale of seized property.

* * * * *
    (b) * * * (1) * * * For further guidance regarding the definition 
of last known address, see Sec. 301.6212-2.
* * * * *
    Par. 27. In Sec. 301.6503(c)-1, paragraph (a) is amended by adding 
a sentence at the end of the paragraph to read as follows:


Sec. 301.6503(c)-1  Suspension of running of period of limitation; 
location of property outside the United States or removal of property 
from the United States; taxpayer outside of United States.

    (a) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2.
* * * * *
    Par. 28. In Sec. 301.6903-1, paragraph (c) is amended by adding a 
sentence after the first sentence of the paragraph to read as follows:


Sec. 301.6903-1  Notice of fiduciary relationship.

* * * * *
    (c) * * * For further guidance regarding the definition of last 
known address, see Sec. 301.6212-2. * * *
* * * * *
Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 99-30178 Filed 11-19-99; 8:45 am]
BILLING CODE 4830-01-U